Review of Financial Ombudsman Service - HM Treasury

The Ombudsman Association recognises that creating favourable conditions for financial firms to invest and innovate is important for economic growth; however, consumer confidence is equally vital to the strength of the UK economy.

• We agree that the Financial Ombudsman Service (FOS) plays a key role in maintaining consumer confidence by providing a fair, reasonable, and accessible alternative to the courts, ensuring consumers can obtain timely redress when things go wrong.
• We welcome the proposals to strengthen liaison between the FOS and the FCA and to ensure greater consistency in FOS determinations. However, we do not consider changes to FOS’s ‘fair and reasonable’ test to be necessary or desirable. The ability for ombudsman schemes to make decisions based on what is fair is fundamental to the ombudsman model in the UK and internationally, and changing that approach would risk undermining its independence and effectiveness.
• We support enabling the FOS to seek clarification from the FCA on the interpretation of their rules but are concerned that allowing parties to request such referrals could create a de facto appeal mechanism, leading to delay and frustration.
• Finally, we believe that making the FOS a subsidiary of the FCA would risk undermining consumer confidence in the independence of the redress system.

Download an accessible PDF of our response below.